Global Markets:

  • Asian stock markets: Nikkei up 0.10 %, Shanghai Composite fell 0.10 %, Hang Seng rose 0.60 %, ASX 200 gained 0.10 %
  • Commodities: Gold at $1230 (+0.25 %), Silver at $16.03 (+0.60 %), WTI Oil at $46.70 (+0.35 %), Brent Oil at $49.10 (+0.40 %)
  • Rates: US 10 year yield at 2.33, UK 10 year yield at 1.31, German 10 year yield at 0.59

News & Data:

  • China GDP q/q 1.7 % vs 1.7 % expected
  • China GDP y/y 6.9 % vs 6.8 % expected
  • China Industrial Production 7.6 % vs 6.5 % expected
  • China Retail Sales 11.0 % vs 10.6 % expected
  • China Fixed Asset Investment y/y 8.6 % vs 8.5 % expected
  • UK Rightmove House Price Index 0.1 % vs -0.4 % previous
  • China second quarter GDP growth tops forecasts on strong investment, consumption – RTRS
  • Dollar nurses losses, China data beats forecasts – RTRS

CFTC Positioning Data:

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  • EUR long 84K vs 77K long last week. Longs increased by 7K
  • GBP short 24K vs 28K short last week. Shorts trimmed by 4K.
  • JPY short 112K vs 75K short last week. Shorts increased by 37K
  • CHF short 0K vs 0K short last week. No change
  • CAD short 9K vs 39K short. Shorts trimmed by 30K.
  • AUD long 37k vs 32k last week. Longs increased by 5K.
  • NZD long 32K vs 29K long last week. Longs increased by 3K

Markets Update:

Asian stock markets rose overnight, following better than expected Chinese data. Both the GDP and retail sales numbers beat expectations, suggesting that domestic demand is picking up as well.

The US Dollar remained offered after the disappointing US inflation and retail sales figures. The market does not see a rate hike before December as likely, and the USD is losing its strength as other central banks are becoming more hawkish.

EUR/USD started the week around 1.1460. Resistance is now seen at 1.15, but a break above that level would signal that the pair could rally towards 1.16 soon.

GBP/USD consolidated in a 1.3090-1.3110 range. The next strong resistance level now lies at 1.33, although the pair might struggle to rally much further given the recent soft economic data and concerns about Brexit.

Meanwhile, the Australian Dollar is looking strong following the breakout above 0.78. There is little resistance now until 0.80, and the risk-on sentiment & recovery of commodity prices could get the AUD/USD there.

Upcoming Events:

  • 10:00 BST – Euro Zone CPI
  • 13:30 BST – US NY Empire State Manufacturing Index
  • 23:45 BST – New Zealand CPI

The Week Ahead:

Tuesday, July 18th

  • 09:30 BST – UK CPI
  • 10:00 BST – German ZEW Economic Sentiment
  • 10:00 BST – Euro Zone ZEW Economic Sentiment
  • 14:30 BST – Bank of England Governor Carney speaks

Wednesday, July 19th

  • 13:30 BST – US Building Permits
  • 13:30 BST – US Housing Starts
  • 15:30 BST – US Crude Oil Inventories

Thursday, July 20th

  • 00:50 BST – Japanese Trade Balance
  • 02:30 BST – Australian Employment Change
  • 02:30 BST – Australian NAB Business Confidence
  • 02:30 BST – Australian Unemployment Rate
  • 07:00 BST – German PPI
  • 07:00 BST – Swiss Trade Balance
  • 07:30 BST – BoJ Press Conference
  • 09:30 BST – UK Retail Sales
  • 12:45 BST – ECB Rate Decision
  • 13:30 BST – ECB Press Conference
  • 13:30 BST – US Philadelphia Fed Manufacturing Index
  • 13:30 BST – US Initial Jobless Claims

Friday, July 21st

  • 13:30 BST – Canadian Retail Sales
  • 13:30 BST – Canadian CPI

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